BlackBerry Ltd (BBRY) Shares Surge & Slip On Takeover by Samsung

BlackBerry Ltd (NASDAQ:BBRY) stock surged and slipped on news of takeover by Samsung. Report of a $6 billion to $7.5 billion acquisition by the South Korean smartphone maker sent BlackBerry’s stock surging as high as 30 percent and up to a 52-week high of $12.63 on Wednesday. The stock declined, however, in after-hours trading on the release of company statement denying the earlier report of the takeover. The stock fell as much as 17 percent to $10.50 after its earlier gains.

According to Reuters, Samsung Electronics approached BlackBerry Ltd (NASDAQ:BBRY) and offered to pay $13.35 to $15.49 for its stock, representing a premium of 38 percent to 60 percent on its price prior to the report. The newswire cited documents and unnamed sources knowledgeable on the matter, saying that Samsung is aiming for BlackBerry’s huge portfolio of patents. It said that representatives from both companies met for discussions last week.

BlackBerry Ltd (BBRY)In an interview with Canada’s CBC News, senior portfolio manager Ross Healy of MacNicol and Associates Asset Management said that acquisition of BlackBerry would be a real asset for Samsung in terms of cash holdings, patent portfolio, and security leadership.

In a subsequent statement, BlackBerry Ltd (NASDAQ:BBRY) noted that it is “aware of certain press reports” regarding its acquisition by Samsung. “BlackBerry has not engaged in discussions with Samsung with respect to any possible offer to purchase BlackBerry. BlackBerry’s policy is not to comment on rumors or speculation, and accordingly it does not intend to comment further,” the statement continued. For its part, Samsung said in an e-mail to Bloomberg that there is no basis for the report.

However, in November last year, BlackBerry Ltd (NASDAQ:BBRY) and Samsung entered into a management-services partnership which allows Samsung’s Knox system to run on the BlackBerry Enterprise Services 12 platform. This deal is similar in nature to a partnership between Microsoft Corporation (NASDAQ:MSFT) and Apple Inc. (NASDAQ:AAPL), and aims to take advantage of BlackBerry’s end-to-end encryption technology to enhance Android security.

This article has been written by Nonito Guntan.

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